Whistleblower Accuses NewsCorp Unit in Smart Card Piracy Row

12 April 2002

Software security consultant Oliver Kommerling has accused NewsCorp subsidiary NDS Group of instructing a member of staff to leak secret codes for a major rival’s smart cards to internet pirates.

The claim is contained in a written deposition from Kommerling to a court in California, part of the row that flared up last month between software group NDS (80%-owned by NewsCorp) and Vivendi Universal’s Canal Plus Technologies [WAMN: 12-Mar-02].

Canal Plus has filed a $1 billion (£0.7bn; €1.1bn) civil lawsuit, asserting that UK-based NDS set out to crack the code protecting its French rival’s smart cards at an Israeli laboratory, before making its findings available to counterfeiters via the web.

Kommerling works for ADSR, a company 60%-owned by NDS. NDS staffers, he told the court, informed him that the details of the Canal Plus code had been sent to an employee called Chris Tarnovsky. “The same NDS employees,” read the deposition, “told me that it was agreed that Mr Tarnovsky should arrange for Canal Plus code to be published on the internet.”

The Vivendi unit claims that the actions of NDS – the market leader in producing smart cards, which protect pay-TV broadcasts – cost it millions of dollars in revenues, while one of its customers, failed British dTV operator ITV Digital, says it has lost at least £100 million from piracy.

Both parties will present motions to a judge next week. Canal Plus wants its rival to produce a number of documents in order to prevent evidence being destroyed.

NDS denies all charges. In its motion, it blasts the lawsuit as “an attempt by an inept competitor to shift the blame for its incompetence, to damage its skilled competitor behind the shield of the litigation privilege and to extract an unfair price in merger negotiations.”

Data sourced from: Financial Times; MediaGuardian.co.uk; additional content by WARC staff